Market participant

The "market participant" exception to the dormant Commerce Clause enables a state to prefer its own residents through a regulation that favors a governmental entity performing a business function (e.g., buying, selling, hiring, or subsidizing).

This exception, however, does not traditionally apply when the government acts as both a market participant and as a market regulator. The municipalities "are doing exactly what the market-participant doctrine says they cannot: While acting as market participants by operating a fee-for-service business enterprise in an area in which there is an established interstate market, respondents are also regulating that market in a discriminatory manner and claiming that their special governmental status somehow insulates them from a dormant Commerce Clause challenge. See ibid. ... Today, however, the Court suggests, contrary to its prior holdings, that States can discriminate in favor of in-state interests while acting both as a market participant and as a market regulator."[1]